Police arrest 22 people for alleged loan fraud

DOWNEY - More than a dozen members of a widespread loan scheme that bilked thousands of mostly Spanish-speaking homeowners throughout California out of their homes appeared in Los Angeles Superior Court last Friday after their arrests earlier in the week.Four others charged in the case, including the two brothers who ran the operation, are in custody in other areas of California. Four other defendants are at large and one is believed in another state. Ten of the defendants were arrested by Los Angeles Police Department Commercial Crimes Division detectives who investigated the massive case. One was arrested by Downey police and two others surrendered late Friday afternoon in the court of Judge Shelly Torrealba. Arraignment was put over until Oct. 29. The defendants are being held on bail ranging from $4.5 million for one to $3.5 million each for the rest. The case against the defendants was filed on Oct. 12 by Deputy District Attorney Walter H. Mueller of the Real Estate Fraud Section. The defendants - 22 in all - are accused of one count each of conspiracy to commit grand theft and conspiracy to commit rent skimming. It was alleged in the complaint that the defendants took in millions of dollars from victims, who sometimes literally were put out on the street when they lost their homes. The complaint alleged the crimes occurred between Jan 1, 2009, and Sept. 30 of this year. The complaint alleged the defendants "entered into a criminal enterprise to defraud over 100 victims out of hundreds of thousands of dollars by creating a fraudulent loan modification and fraudulent class action lawsuit scheme." Instead of saving the homeowners' homes, the defendants eventually seized them. In some cases, the defendants moved in themselves. The complaint alleged that the scheme primarily involved Spanish-speaking homeowners who were having financial difficulties during the housing market downturn. Many of the victims were unable to obtain legitimate government assistance and turned to the defendants, who advertised heavily in the Latino community. The victims, according to the complaint, paid large upfront fees to join the program and stay in their homes. They allegedly were told that the defendants would stop the foreclosure and would negotiate a reduced payment. It was called the "Caretaker Plan" and supposedly was designed to allow the victims to save and live in their homes. Instead, the victims lost their homes. The scheme was formed, according to authorities by David Zepeda, 59, and his brother, John, 61. The brothers were charged in San Diego County with multiple counts of conspiracy, identity theft, forgery, grand theft and other crimes. John Zepeda was convicted and is in state prison. David Zepeda awaits trial in San Diego County. Both are charged in the Los Angeles case. The Zepedas operate Sunset Beach Management, which administered the scheme. The scheme also included "law" groups - that had no lawyers - which were created to recover foreclosed property. Authorities said the scheme operated throughout California and had moved into Nevada.

********** Published: October 25, 2012 - Volume 11 - Issue 28